Sugar — a seemingly simple kitchen staple — holds a complex and powerful position within Pakistan’s economy. With an annual production and consumption hovering around 7 million tonnes, sugar is not only an essential household item, but also a strategic commodity impacting national food security, industry dynamics, and government policy. Yet, for a commodity so central to the country’s socio-economic fabric, the mechanisms that govern its trade remain largely opaque, informal, and inefficient.

At present, sugar trading in Pakistan is carried out through a sprawling network of intermediaries and informal ‘exchanges’– marketplaces operating without licenses or regulatory oversight. Transactions are executed on platforms as rudimentary as WhatsApp, where truckloads (typically 12-tonne lots) are bought and sold on speculative pricing. Prices fluctuate based on these informal notations, and deals are struck without transparency, accountability, or the protections offered by centralised clearing systems. This market structure not only limits fair price discovery, but also exposes traders to defaults, arbitrary tax liabilities, and legal risks.

Utilising a formal commodities exchange — such as the Pakistan Mercantile Exchange (PMEX) — for sugar and similar agricultural products is not just a recommendation; it is a necessity.

Let’s begin with the fundamentals. A regulated commodities exchange introduces three critical elements to any market: transparency, trust, and efficiency. In the case of........

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